Commercial Policy Coverage – What’s Covered?

Business owners in Dallas, Mesquite, Duncanville, Grand Prairie, Fort Worth, De Soto, Arlington, Mansfield, Seagoville, Rowlette, and other places in Texas may ask the same question. What ends up happening when a loss occurs in the business, is that the business owner calls his insurance company and makes a claim, then the insurance company tells that business owner that the type of loss that was incurred is not the type of loss that is covered under the commercial insurance policy.
The Aspen Daily News has reported a story that follows the above scenario. The title of the article is, “Jimmy’s Sues Insurance Company Over Bombed-Out 2008 New Years Eve.” The articles author is Brent Gardner-Smith.
Jimmy’s is a restaurant in Aspen, Colorado.
What happened is described in the article. It appears that bomb threat notes were left at two Aspen banks, a Wells Fargo and Vectra Bank. The notes demanded money and a threat of “mass death” and “a very big fire cracker.” Crude looking bombs looking like Christmas presents were left near the banks. These bombs were real and were later detonated by a Grand junction, Colorado, bomb squad.
There were not any injuries or damage as a result of the blasts but the threat shut down 16 square blocks of Aspen’s main business district and resulted in an evacuation at 5 P.M. as a precaution and the area did not re-open until 5 A.M.
The bomber was identified and was later found died from a self-inflicted gun wound.
For the restaurants in this area, New Year’s Eve is their biggest night of the year. One of the restaurants, Jimmy’s, filed suit to prevent the two year statute of limitations from running.
The article tells us that Jimmy’s, like may other restaurants in Aspen, had to cancel two pre-paid New year’s Eve dinner seatings and refunded money to its guests, who had to scramble to find other ways to celebrate the end of 2008.
The owner of Jimmy’s is The Fierce American Food Co., LLC. Their insurance company is Homestate Companies, which also is known as the Berkshire Hathaway Homestate Companies.
The lawsuit papers say that Jimmy’s suffered in excess of $100,000 in damages.
Jimmy’s filed a claim with Homestate and the claim was denied. Homestate is saying there was not any coverage because there was not any physical damage to the property. The claim was filed under the interruption of business operations coverage portion of the policy.
Lawyers for Jimmy’s are saying that even if there is not coverage under the business operations coverge portion of the policy, that the terrorism coverage portion of the policy clearly applies.
It is noteworthy that at one time, most or all of the restaurants in the area were making claims for coverage and that it is estimated that millions of dollars were lost as a result of the bomb threats. At the time of the publication of this article, only Jimmy’s had filed suit.
The lesson to be taken from this article is for a business owner to understand what his coverages are in the policies of insurance he buys to protect that business. An experienced Insurance Law Attorney shoud be consulted and given a copy of the policy. A discussion of the facts regarding the cause of the loss and the way the loss was incurred would allow the attorney to discuss options available in a reliable way.
Most policies regarding autos and homes are pretty standard. The variations will be minimum most of the time. However, in commercial policies there is not a lot of standardization. Plus, lots of times, a policy on its face may seem to read in such a way as to provide coverage but then an “endorsement” to the policy takes away the coverage that may have at first seemed to exist.

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